Hong Kong GST Proposal Sparks Street Protest

by Mary Swire, Tax-News.com, Hong Kong

09 August 2006

Thousands of demonstrators took to the streets of Hong Kong on Sunday to protest against the government's proposal to introduce a Goods and Services Tax in the territory.

The pro-business Liberal Party, which organised the march, claimed that as many as 10,000 people, including local businesses operators, traders and retailers took part, although a spokesperson from the police department stated that the number taking part was closer to 3,000.

Bearing placards with slogans such as "Say no to the sales tax" and "No GST" the protestors handed in a petition at the government headquarters. They argue that the proposed levy, expected to be 5%, will harm the lucrative tourist trade.

Miriam Lau, deputy chairwoman of the Liberal Party, said that the protest was the first of many.

"This march indicates that a GST would seriously impact trades and businesses and they are very anxious to tell the government that they do not wish it to implement it," she commented.

In a statement, the Financial Services & the Treasury Bureau said that the proposals put forward in the tax reform consultation document are not meant to be conclusive, but are intended to stimulate "rational and informed discussion" on the issue.

"Hong Kong must make good use of the respite provided by the economic recovery to act now so that the city's public finances will be better able to withstand future economic and social challenges," the bureau stated.

"The city must act now to broaden its tax base for the future prosperity of Hong Kong, the bureau noted, adding this will ultimately affect each Hong Kong resident individually," it added.

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